To be Vista ReadyBoost compatible your device needs to be larger than 256MB in size with at least 230MB free. It needs to be able the perform random 4K reads at 2.5MB per second or better and perform 512KB writes at 1.7MB or better. ReadyBoost will support devices up to 32GB in either FAT or NTFS, but only up to 4GB on FAT32 devices.
(USB 1.0 and 1.1 are not supported, the same for external USB memory card readers.)
Video provided for those who cannot follow directions.
Link provided here if the video doesn't load
(I used CamStudio 2.0 for this video, which I plan to use for all future screen capturing (available at CamStudio.org for free download, the link is at the bottom)